Great, so there’s nothing to worry about for big PBMs ExpressScripts and Medco Health? Nothing except the bone-chilling fear that Wal-Mart inspires in shareholders of potential rivals. “We believe the Wal-Mart announcement could be a meaningful headline risk for the group, which is currently trading near all-time high valuations,” Stanicky writes, and recommends investors “avoid PBMs into the quarter.”

“Wal-Mart Strikes Again,” says the headline on a note from UBS’s Ricky Goldwasser. Fear of Wal-Mart could push PBM stocks down by announcing they’ve closed a pharmacy benefits deal with some company. Even so, “We do not believe that they will take much business away from the independent PBMs,” Goldwasser writes.

Jeffries & Company’s Arthur I. Henderson sounds a similar note of short-term stock pressure but no long-term threat — unless Wal-Mart acquires an existing PBM. Wal-Mart hasn’t raised that possibility, but it is kind of fun to consider, especially in light of last year’s CVS-Caremark merger that created an integrated retail pharmacy-PBM.

Comments (5 of 6)

As a physician dealing with uninsured patients I appreciate WalMart's $4 generics program. It was the first to help the uninsured in this area. The PBM's did nothing even though they knew that generics such as Amoxicillin were aquired for less than $.50 for a course of treatment by their vendors such as Walgreen's and CVS.
I had to pay $25.00 for such a course at Walgreen's 2 years ago.
With its large volume of prescription filling, its huge number of insured employees, its forays into optometry and urgent care, WalMart could be a threat to the PBMs - if it wants to be.There is still a tremendous amount of "excess profits"

8:43 pm January 28, 2008

Clancy wrote :

With the advent of Walmart Urgent Care clinics..this is a logical extension. Healthcare behemoths! Get ready! Walmart will rock your world! They are the only guys (that care and aren't government) with enough money to do it.

10:46 am January 27, 2008

Anonymous wrote :

They don't need mail order facilities, they can sell 90 day supplies through the retail stores. They should be able to squeeze some fat from the current PBM model, including network spread.

12:47 pm January 25, 2008

Ed Beller wrote :

Walmart is trying to be too many things for too many people. They are having trouble with the core business, retailing. It doesn't make sense to go against the specialists in the PBM business. They will be crushed by Medco & ExpressScripts